Dollar Tree, Inc. Reports First Quarter Results07:32 EDT Thursday, May 20, 2010
CHESAPEAKE, Va. (Business Wire) -- Dollar Tree, Inc. (NASDAQ: DLTR), the nation's leading operator of
discount variety stores selling everything for $1 or less, reported its
results for the quarter ended May 1, 2010 (“first quarter”) .
Consolidated net sales for the first quarter were $1.35 billion, a 12.6%
increase compared to $1.20 billion reported for the quarter ended May 2,
2009 (“first quarter 2009”). Comparable store sales increased 6.5%, on
top of a 9.2% increase for the first quarter 2009.
Earnings per diluted share for the first quarter were $0.73, including a
non-recurring, non-cash charge of $26.3 million, or $0.19 per diluted
share, relating to the Company's previously announced retail inventory
change. Absent this charge, diluted earnings per share were $0.92, an
increase of 39.4% compared to the $0.66 earnings per diluted share
reported for the first quarter 2009.
“I am pleased with the continued momentum in our business,” President
and CEO Bob Sasser said. “Both traffic and average ticket increased
during the quarter driving sustained growth in sales and earnings.
Leading categories in the first quarter included health and beauty care
products, food, household consumables, and party goods.”
Operating margin for the quarter was 7.6%, including the aforementioned
non-recurring, non-cash charge, which amounted to 190 basis points of
gross margin. Excluding the charge, operating margin was 9.5%, a 140
basis point improvement from the 8.1% operating margin in the first
quarter 2009.
Cash at quarter-end totaled approximately $339 million, compared with
$355 million at the end of the first quarter 2009. During the first
quarter, the Company expended $218 million for common stock repurchases,
including a $200 million Accelerated Share Repurchase Program. At the
end of the first quarter, $42.2 million remains under the $500 million
share repurchase program authorized by the Board of Directors.
The Company continues to grow. During the first quarter, Dollar Tree
opened 74 stores, closed 6 stores, and expanded or relocated 34 stores.
Retail selling square footage increased 6.5% compared to a year ago, to
33.0 million square feet.
The Company estimates sales for the second quarter of 2010 to be in the
range of $1.32 billion to $1.36 billion, based on low to mid single
digit positive comparable store sales. Diluted earnings per share are
estimated to be in the range of $0.77 to $0.85.
Full year sales are now estimated to be in the range of $5.67 billion to
$5.80 billion and diluted earnings per share are expected to be $4.10 to
$4.31, including the impact of the non-cash, non-recurring charge in the
first quarter. Excluding the charge, diluted earnings per share for the
full year 2010 are expected to be $4.29 to $4.50.
On Thursday, May 20, 2010, the Company will host a conference call to
discuss its earnings results at 9:00 a.m. EDT. The telephone number for
the call is 888-713-3592. A recorded version of the call will be
available until midnight Thursday, May 27, and may be accessed by
dialing 888-203-1112, and the access code is 2141527. A webcast of the
call is accessible through Dollar Tree's website, www.dollartreeinfo.com/investors/news/events
and will remain online until midnight Thursday, May 27.
Dollar Tree, a Fortune 500 Company, operated 3,874 stores in 48 states
as of May 1, 2010, with total retail selling square footage of 33.0
million. To learn more about the Company, visit www.DollarTree.com.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS: Our press release contains
"forward-looking statements" as that term is used in the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
address future events, developments or results and typically use words
such as believe, anticipate, expect, intend, plan, forecast, or
estimate. For example, our forward-looking statements include statements
regarding second quarter and full year sales and second quarter and full
year diluted earnings per share. For a discussion of the risks,
uncertainties and assumptions that could affect our future events,
developments or results, you should carefully review the “Risk Factors,”
"Business," and “Management's Discussion and Analysis of Financial
Condition and Results of Operations” sections in our Annual Report on
Form 10 - K filed March 19, 2010. We are not obligated to release
publicly any revisions to any forward-looking statements contained in
this press release to reflect events or circumstances occurring after
the date of this report and you should not expect us to do so.
DOLLAR TREE, INC.Condensed Consolidated Income Statements(Dollars in millions, except per share data)(Unaudited)
First Quarter EndedMay 1,
May 2,20102009
Net sales
$
1,352.6
$
1,201.1
Cost of sales, excluding non-cash beginning inventory adjustment
876.1
785.7
Non-cash beginning inventory adjustment
26.3
-
Gross profit
450.2
415.4
33.3
%
34.6
%
Selling, general & administrative expenses
347.6
317.8
25.7
%
26.5
%
Operating income
102.6
97.6
7.6
%
8.1
%
Interest expense, net
1.4
0.8
Other income
(0.9
)
-
Income before income taxes
102.1
96.8
7.5
%
8.1
%
Income tax expense
38.5
36.4
Income tax rate
37.7
%
37.6
%
Net income
$
63.6
$
60.4
4.7
%
5.0
%
Net earnings per share:
Basic
$
0.74
$
0.67
Weighted average number of shares
86.2
90.5
Diluted
$
0.73
$
0.66
Weighted average number of shares
86.8
91.1
DOLLAR TREE, INC.Condensed Consolidated Balance Sheets(Dollars in millions)(Unaudited)
May 1,Jan. 30,May 2,201020102009
Cash and cash equivalents
$
338.6
$
571.6
$
355.2
Short-term investments
51.5
27.8
-
Merchandise inventories
707.7
679.8
688.2
Other current assets
47.0
26.4
65.8
Total current assets
1,144.8
1,305.6
1,109.2
Property and equipment, net
719.4
714.3
705.0
Goodwill
133.3
133.3
133.3
Deferred tax assets
43.5
35.0
41.5
Other assets, net
101.7
101.5
84.7
Total assets
$
2,142.7
$
2,289.7
$
2,073.7
Current portion of long-term debt
$
17.5
$
17.5
$
17.6
Accounts payable
258.6
219.9
208.6
Other current liabilities
154.4
189.9
145.3
Income taxes payable, current
37.7
48.6
42.9
Total current liabilities
468.2
475.9
414.4
Long-term debt, excluding current portion
250.0
250.0
250.0
Income taxes payable, long-term
15.0
14.4
15.0
Other liabilities
116.5
120.2
112.8
Total liabilities
849.7
860.5
792.2
Shareholders' equity
1,293.0
1,429.2
1,281.5
Total liabilities and shareholders' equity
$
2,142.7
$
2,289.7
$
2,073.7
STORE DATA:
Number of stores open at end of period
3,874
3,806
3,667
Total selling square footage (in millions)
33.0
32.3
31.0
DOLLAR TREE, INC.Condensed Consolidated Statements of Cash Flows(Dollars in millions)(Unaudited)
Three Months EndedMay 1,
May 2,20102009
Cash flows from operating activities:
Net income
$
63.6
$
60.4
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
39.3
38.8
Other non-cash adjustments
26.3
2.0
Changes in working capital
(93.4
)
(46.6
)
Total adjustments
(27.8
)
(5.8
)
Net cash provided by operating activities
35.8
54.6
Cash flows from investing activities:
Capital expenditures
(45.1
)
(34.1
)
Purchase of short-term investments
(29.0
)
-
Proceeds from maturities of short-term investments
5.4
-
Purchase of restricted investments
(36.4
)
(0.1
)
Proceeds from maturities of restricted investments
36.4
-
Net cash used in investing activities
(68.7
)
(34.2
)
Cash flows from financing activities:
Proceeds from stock issued pursuant to stock-based compensation
plans
13.3
9.3
Payments for share repurchases
(220.8
)
(39.6
)
Tax benefit of stock-based compensation
7.5
0.8
Other
(0.1
)
(0.1
)
Net cash used in financing activities
(200.1
)
(29.6
)
Net decrease in cash and cash equivalents
(233.0
)
(9.2
)
Cash and cash equivalents at beginning of period
571.6
364.4
Cash and cash equivalents at end of period
$
338.6
$
355.2

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